OCL India Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
CESTAT Kolkata allowed the appeal filed by OCL India Limited and set aside the demand for central excise duty on sales commission paid to selling agents. The appellant manufactured and cleared refractory products under Chapters 68, 39 and 38 of the Central Excise Tariff Act, 1985. During April 2005 to March 2006, it paid sales commission to foreign agents for procuring export orders and to Indian selling agents for domestic sales.
A Show Cause Notice dated 19.04.2010 was issued under Section 11A of the Central Excise Act, 1944, invoking the extended limitation period and proposing recovery of central excise duty on the sales commission, along with interest and penalty under Section 11AC. By Order-in-Original dated 27.10.2017, duty of Rs.3,04,152/- was confirmed with interest and an equivalent penalty. The Commissioner (Appeals) upheld the order.
Before CESTAT, the appellant submitted that the buyers and sellers were unrelated, price was the sole consideration, and sales commission was neither part of the price paid or payable by buyers nor an amount payable by buyers to or on behalf of the appellant. It was submitted that the commission was borne by the appellant and no additional consideration flowed from the buyers. The appellant also contested the demand on limitation.
